Electricity Market

In economic terms, electricity (both power and energy) is a commodity capable of being bought, sold and traded. An electricity market is a system for effecting purchases, through bids to buy; sales, through offers to sell; and short-term trades, generally in the form of financial or obligation swaps. Bids and offers use supply and demand principles to set the price. Long-term trades are contracts similar to power purchase agreements and generally considered private bi-lateral transactions between counterparties.

Wholesale transactions (bids and offers) in electricity are typically cleared and settled by the market operator or a special-purpose independent entity charged exclusively with that function. Market operators do not clear trades but often require knowledge of the trade in order to maintain generation and load balance. The commodities within an electric market generally consist of two types: power and energy. Power is the metered net electrical transfer rate at any given moment and is measured in megawatts (MW). Energy is electricity that flows through a metered point for a given period and is measured in megawatt hours (MWh).

Markets for energy related commodities are net generation output for a number of intervals usually in increments of 5, 15 and 60 minutes. Markets for power related commodities required by, managed by (and paid for by) market operators to ensure reliability, are considered ancillary services and include such names as spinning reserve, non-spinning reserve, operating reserves, responsive reserve, regulation up, regulation down, and installed capacity.

In addition, for most major operators, there are markets for transmission congestion and electricity derivatives, such as electricity futures and options, which are actively traded. These markets developed as a result of the restructuring of electric power systems around the world. This process has often gone on in parallel with the restructuring of natural gas markets.

Read more about Electricity MarketHistory, Nature of The Market, Wholesale Electricity Market, Retail Electricity Market, Electricity Market Experience

Other articles related to "electricity market, markets, electricity, market":

Electricity Market Experience
... Many regional markets have achieved some success and the ongoing trend continues to be towards deregulation and introduction of competition ... However in 2000/2001 major failures such as the California electricity crisis and the Enron debacle caused a slow down in the pace of change and in some regions an increase in market regulation and ... a temporary one against the longer term trend towards more open and competitive markets ...
Energy In Queensland - Electricity Market
... The highest ever peak demand for electricity in Queensland was 8,891 MW and occurred on 18 January 2010 ... resources sector creates a strong demand for electricity at mines, smelters and refineries, which are often located in regional Queensland ... With improvements to the electricity systems at either end, the capacity has more than doubled ...
Electricity Sector In Nicaragua - Responsibilities in The Electricity Sector - Policy and Regulation
... The regulatory entities for the electricity sector in Nicaragua are The Ministry of Energy and Mines (MEM), created in January 2007, replaced the National Energy Commission (CNE) ... is in charge of producing the development strategies for the national electricity sector ... the “Indicative plan for the generation in the electricity sector in Nicaragua, 2003-2014”, which aims to provide useful insight for private ...
Electricity Sector In New Zealand - Organisation - Electricity Market
... Electricity is traded at a wholesale level in a spot market ... The market operation is managed by several service providers under agreements with the Electricity Authority (NZ) ... The physical operation of the market is managed by Transpower in its role as System Operator ...
Enel - History - Monopoly and Free Competition
... Liberalisation of the electricity market took place in 1999 with the so-called Bersani Decree, which certainly had a huge impact on the subsequent development of Enel ... The issue of Enel’s monopoly in the specific market of electricity had been raised when legal aspects related to the principles of free competition were discussed ... The Italian electricity market, one of the most liberalised in Europe, currently comprises around 100 utility companies including major European groups such as France’s Électricité de France and GDF Suez ...

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